The mainland's car industry more than tripled debt issuance this year as borrowing costs fell and a rebound in economic growth drove forecasts for 2013 vehicle sales above 20 million for the first time.

Guangzhou Automobile Industry Group, Zhejiang Geely and Wanxiang Qianchao are among companies that have sold 8.2 billion yuan (HK$10.1 billion) of debt so far this year, compared with 2.5 billion yuan a year earlier, according to data compiled by Bloomberg. Overall corporate bond sales rose 21 per cent to 399 billion yuan.

The China Association of Automobile Manufacturers said last month that 2013 vehicle sales might rise 7 per cent to a record, compared with last year's 4 per cent pace, after the economy accelerated for the first time in seven quarters. Guangzhou Auto joined FAW Car in announcing plans this year to expand capacity as the yield on its January 2014 debt fell 45 basis points since its sale last month. A similar yield for Volkswagen was little changed at 0.665 per cent.

"Car companies probably have more demand for money as the economy recovers and car sales jump," said Lv Chunjie, a Shanghai-based bond analyst at Guotai Junan Securities. "Also, issuers are trying to take advantage of the low borrowing costs at the moment."

China, which passed the United States to become the world's biggest vehicle market in 2009, posted economic growth of 7.9 per cent in the fourth quarter, the first acceleration since the last three months of 2010. Expansion in the first quarter may be 8.2 per cent, according to the median estimate of 23 economists in a survey.

Analysts at LMC Automotive, IHS Automotive and McKinsey have given estimates for 2013 vehicles sales exceeding that of the national automobile association. LMC said it expected vehicles sales to gain 10 per cent, IHS sees growth of 8.9 per cent and a November report by McKinsey estimated an increase of 8 per cent.

General Motors China president Bob Socia said in December that sales of vehicles, including passenger cars, multipurpose and sport utility vehicles, might rise as much as 8 per cent to 21 million units this year.

Total vehicle sales rose 46 per cent to 2.03 million units in January, as car sales surged 49 per cent to a monthly record of 1.73 million units, the auto association said. The pace of those increases was distorted by the week-long Lunar New Year holiday, which was celebrated in January last year and in February this year.

"Car sales are directly related to incomes," IHS analyst Lin Huaibin said. "As the economy grows faster, incomes will also grow faster," he said, adding that carmakers are selling more bonds to fund production and development projects.

This article appeared in the South China Morning Post print edition as Forecasts drive up car bond sales